Fitch cuts Pakistan credit rating deeper into junk territory: Financial Times

[Navash]

The markets have rejected the horseshit served up by pti propaganda machine about the economy. No, you can't blame this on pmln as it is the govt's ability to produce future value that has been downgraded. The dollar devaluation is also an indicator that the markets see less value in pkr in the future. Modys has also given a strong indicator of downgrading.
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Fitch has cut Pakistan’s debt rating deeper into junk territory as the cash-strapped country grapples with a lethal combination of low reserves, elevated debt repayments and a weakening fiscal position.

The rating agency on Friday said it had downgraded Pakistan’s long-term foreign-currency issuer default rating by one notch to B- from B.

The move was in reaction to the country’s rising debt level which is expected to swell due to its weak repayment capacity. At $7.3bn, Pakistan’s foreign currency reserves have dropped to the critical level of around one and a half month of import cover.

Over the next three years, the country’s sovereign debt-service obligations will range between $7bn-$9bn per year, which includes a $1bn Eurobond repayment due in April 2019.

Fitch said that “rupee depreciation, lower oil prices and newly imposed import duties will drive a deceleration in imports, while exports are likely to strengthen gradually.” However, the credit agency added in its statement that this may not be sufficient to re-build reserve buffers sustainably.

This week the global credit rating agency Moody’s also said that it was considering downgrading Pakistan’s external credit rating.

Back in October, Pakistan requested a bailout from the International Monetary Fund. This was expected by mid-January, but Fitch’s research arm said this could be delayed till the end of March.

If successful, it could mean attracting further financing and budget support from the World Bank and the Asian Development Bank. But if the deal falls through, the country’s foreign-exchange reserves would continue to drop.

https://www.ft.com/content/7eb2837a-ff91-11e8-ac00-57a2a826423e

 

[Nadir Bashir]

Whom we should blame......This all is due to previous Government Decisions................
Every thing points to previous Governments and most of that to Nawaz Sharif Government.................For example

"Over the next three years, the country’s sovereign debt-service obligations will range between $7bn-$9bn per year, which includes a $1bn Eurobond repayment due in April 2019."

And this not the only case, you have to SBP report, how PMLN has destroyed economy......

 

[hamidk]

Allah raham karien.

 

[imran_hosein_fan]

khadim Rizvi ko de do hukumat, woh sub theek kerday ga, iss mullay ka maqsad yeh hai thread start kernay ka!

 

[SpIDeR.]

simple what I am assuming:unsure:, when PML(N) left the govt there was no current deficit, there was no import and export gap, and Pakistan foreign account was reaching to 100B$ and all govt corporations (PIA, Railway, Steel Mils etc) was in profit and PTI 100 days govt is responsible for the current situation, like current deficit, import, and export gap, around 90B of loans etc.. :unsure:

https://www.ft.com/content/7eb2837a-ff91-11e8-ac00-57a2a826423e

 

[Navash]

simple what I am assuming:unsure:, when PML(N) left the govt there was no current deficit, there was no import and export gap, and Pakistan foreign account was reaching to 100B$ and all govt corporations (PIA, Railway, Steel Mils etc) was in profit and PTI 100 days govt is responsible for the current situation, like current deficit, import, and export gap, around 90B of loans etc.. :unsure:

again you missed my point. this is financial institutions losing confidence in pti govt producing value in the future, future, future, FUTURE. did you get it?

 

[Will_Bite]

For fitch, this is an easy move as it brings them lobbyists and clients.
S&P and Moody's are the 2 main credit rating agencies....they cover 80percent of the ratings market. Smaller players like fitch use such shock and awe figures to remain in the picture.plus, they are probably being used by imf to demand a shored up interest rate on any loan
Anyway, thanks to horrific financial planning by pmln, we are paying the price on many fronts.

 

[SpIDeR.]

man as a country we have to focus on our current internal issues and try to fix these issues and this is what the current govt is doing..

these so-called financial institutions appreciate PPP & PMLN when the previous govt's maintaining the $$ rate with foreign accounts and loans. at that time these so-called financial institutions didn't lose their confidence on Pakistan ? or didn't raise the alarm, because of these paper manipulation may Pakistan face that kind of situation in future, future, future which Pakistan is facing today...........................

I hope you got my point as well.

again you missed my point. this is financial institutions losing confidence in pti govt producing value in the future, future, future, FUTURE. did you get it?

 

[Politically1981]

No you can’t blame PMLN????? See below:


The move was in reaction to the country’s rising debt level which is expected to swell due to its weak repayment capacity. At $7.3bn, Pakistan’s foreign currency reserves have dropped to the critical level of around one and a half month of import cover.

Over the next three years, the country’s sovereign debt-service obligations will range between $7bn-$9bn per year, which includes a $1bn Eurobond repayment due in April 2019.

Who took those loans, who issued Eurobonds?

 

[Politically1981]

again you missed my point. this is financial institutions losing confidence in pti govt producing value in the future, future, future, FUTURE. did you get it?

Really? Moody is a financial institution or a credit rating agency?

 

[Politically1981]

again you missed my point. this is financial institutions losing confidence in pti govt producing value in the future, future, future, FUTURE. did you get it?

They are assessing Pakistan’s repaying of debut ability for a forseable future taking into consideration current import, export level, trade deficit, debt servicing. They can only factor in the measures being taken up by the government to reduce the trade and fiscal deficit. Credit rating agencies don’t comment on governments non monetary reforms for instance increasing exports by facilitating export industry etc as they can’t put a monetary value on it. It could either work or won’t work.

So stop trying to an expert and misreading or misinterpreting the report.

 

[Navash]

They are assessing Pakistan’s repaying of debut ability for a forseable future

So stop trying to an expert and misreading or misinterpreting the report.

so after assessing govt plans for the foreseeable future, they have downgraded the outlook, how am I misreading or misinterpreting?

 

[Navash]

Really? Moody is a financial institution or a credit rating agency?

I meant financial institution in the sense that they analyze the financials, you are right in the strict sense they are credit rating agency. It does not change their outlook though.

 

[miafridi]

Aftershocks of PML-N's bad policies. They wasted $8 billion only to artificially control the dollar rate.

 

[Politically1981]

so after assessing govt plans for the foreseeable future, they have downgraded the outlook, how am I misreading or misinterpreting?

They do not assess governments plans but make an assessment on the basis of government's current fiscal and budgetary measures, and compare with the current liabilities. For instance, they know how much money the government needs to pay in the next 24 months, how much reserves the government has, the current account and trade deficit and that is how they assess the ability of any particular government to repay its loans. It is purely an assessment of Government's repaying ability based on current financial position. When I say current, that also includes government's budgetary and fiscal measures affecting future too. But it does not include the positive impact of government reforms on the economy etc.

 

[Politically1981]

I must also point towards the supreme decision not to deduct taxes on mobile phone cards. This is a clear interference of the superior judiciary costing the government 80Billion rupees a year. This is purely the job of a government to levy taxes and we must realize that this chief justice is a curse and not a blessing.

 

[Navash]

They do not assess governments plans but make an assessment on the basis of government's current fiscal and budgetary measures

The govt is responsible for fiscal and budgetary measures. so the responsibility for the downgrade is pti govt.

 

[muhammadadeel]

V only care about work done in the Pakistan.
Not what some bastard says.

 

[Navash]

simple what I am assuming:unsure:, when PML(N) left the govt there was no current deficit, there was no import and export gap, and Pakistan foreign account was reaching to 100B$ and all govt corporations (PIA, Railway, Steel Mils etc) was in profit and PTI 100 days govt is responsible for the current situation, like current deficit, import, and export gap, around 90B of loans etc.. :unsure:

Aftershocks of PML-N's bad policies. They wasted $8 billion only to artificially control the dollar rate.

No you can’t blame PMLN????? See below:


The move was in reaction to the country’s rising debt level which is expected to swell due to its weak repayment capacity. At $7.3bn, Pakistan’s foreign currency reserves have dropped to the critical level of around one and a half month of import cover.

Over the next three years, the country’s sovereign debt-service obligations will range between $7bn-$9bn per year, which includes a $1bn Eurobond repayment due in April 2019.

Who took those loans, who issued Eurobonds?

Whom we should blame......This all is due to previous Government Decisions................
Every thing points to previous Governments and most of that to Nawaz Sharif Government.................For example

"Over the next three years, the country’s sovereign debt-service obligations will range between $7bn-$9bn per year, which includes a $1bn Eurobond repayment due in April 2019."

And this not the only case, you have to SBP report, how PMLN has destroyed economy......

you guys keep blaming pmln, but facts are you have taken the economy in your 4 months to a lower level then them. the failure is pti govt ability to implement the corrective measures. Investors don't look at promises or fairy tales, they look at cold hard facts. It is no wonder fitch is downgrading.

ik has no idea how to run a country. his only expertise is collecting donations and living on a minimum budget. this is what he has been doing all his life. what does he do when he comes into power? sell cars and cows, and run around the world asking for donations.

 

[Navash]

V only care about work done in the Pakistan.
Not what some bastard says.

bad credit rating means no foreign investment, no foreign investment means no money to run the govt, no govt means nothing gets done.